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At the recent Natural
Products Expo West conference in March 2013, members of the natural products
community attended a jam-packed session on the State of the
Industry. Leading the panel was Nutrition
Business Journal (NBJ) Editor-in-Chief, Marc Brush, who presented market
data forecasting that dietary supplements sales should continue to rise, but the
percentage share of the entire natural products market held by supplements will
gradually decrease during the next decade.1 In fact, supplements and
functional foods, once the two leading market categories, have been losing
their dominance to natural and organic foods since at least 2011. Supplements’ market
share is projected to drop from 24 percent in 2011 to about 22 percent in 2021;
functional foods will likely decrease from a 33-percent share of the market to a
28-percent share.
Meanwhile, the natural and organic foods sector is expected to continue its
takeover of the natural products market, with sales projected to grow at a much
faster pace than those of supplements. In 2011, natural and organic foods held
the majority share of the market at 34 percent (with sales at $43 billion),
which is expected to increase to 40 percent in the next decade (with sales
projected to more than double, at approximately $104 billion). Two notable areas
of growth within this sector are fruits and vegetables, as well as natural
coloring agents — typically sourced from plants and herbs. (NBJ, one of the contributors
to HerbalGram’s annual Market Report,
bases these statistics and forecasts on its in-house, proprietary research on
various product categories and sales channels.)
“There is solid ground for the engineered wings of nutrition — supplements and functional food, broadly —
but these approaches to nutrition just aren’t seeing the growth of their peers
over in natural and organic,” Brush told the American Botanical Council in an
email (March 27, 2013). “I do believe we are struggling as consumers to adapt
our purchasing to pretty powerful changes — from efficiencies of production to
propositions of sustainability and humaneness, from fast to slow, from big to
small, from complexity to simplicity. This reverberates throughout the food
chain, to the benefit of those wings of the industry and product categories
that better align there. I would argue a bright future for whole-food
supplements, as well as herbs and botanicals for that matter. ”
Areas of projected growth within
the supplements and functional foods sectors, according to NBJ, include sports
nutrition, beverages, protein-based powders and meal replacements (especially
those that are plant-based), and — as Brush noted above — whole-food
supplements.1
Although the natural products industry is still determining
the official definition of a whole-food supplement, this term generally entails
a supplement containing condensed or minimally processed constituents — which
includes growing nutrients in yeast — that represent the full spectrum of an
entire food’s nutrients, as opposed to supplements containing more chemically defined
standardized extracts (some of which may not contain the full spectrum of
phytochemical constituents found in the whole plant or plant part) or synthetically
produced substances
2
(M. Brush, email, April 3, 2013). According to
Brush’s “State of the Industry” PowerPoint presentation, “The further a raw
material changes from its original whole food state, the less consumer
interest.”1
During 2012, whole-food supplements had approximately
$1.1 billion in sales, which was more than 10 percent annual growth, making
this one of the fastest-growing categories in the Vitamins, Minerals, and
Supplements sector.
“Consumers don’t eat well enough — not even close — but they know more and more
about the repercussions of that deficiency,” Brush said in his email to ABC.
“Add in concern over the chemical inputs necessary to standardize, as well as
the psychic association of standardization as ‘unnatural,’ and you’ve got a
tough bill of goods to sell. Natural — as contentious as that term might be in
this industry — remains intuitive and powerful. It’s food left to its own
devices. But the hunger is still there for the magic pill, without question.
Dietary supplements are a $32 billion industry in the US, after all.”
Also of particular
interest to consumers are whole-food supplements that are organic, non-genetically
modified organism (GMO), raw, vegetarian or vegan, local, and/or fair trade. These
trends — according to session panelists Carlotta Mast of New Hope Natural
Media, Janica Lane of Partnership Capital Growth Advisors,
and Ken Whitman of Natural Vitality — are partly based on
consumer interest in simple products, authentic products with integrity, as
well as products that aim to uphold nature’s “ancient wisdom.” Brush said in
his email that he also expects the herbal and botanical areas of the
supplements sector to grow, particularly teas, as well as botanicals for mood
and sleep.
“Herbs and botanicals
speak to so many of the trends of interest to natural consumers, and they have
real purchase [power] as safe solutions to some of the looming needs in the
‘brain space’ — nutrition’s next wave of major innovation. At one end of the
market, you have seniors facing cognitive decline, and at the other end you
have Millennials overstressed and depressed.” (Millennials are comprised of
young adults aged 18 to 29 years, also referred to as Generation Y.)
Following the concept of
whole-food supplements, Brush said during the Expo session that foods that are naturally functional — as opposed to
functional foods, which can contain
added vitamins and/or minerals, etc. — will have a more prominent place in the
natural products market. Reciting the mantra, “Make Your Own Supplements,” he noted
products like flax (Linum usitatissimum)
seed and maca (Lepidium meyenii) powder that consumers can add to foods like
smoothies as a means of supplementing their diets.
“There is growing
awareness of the relative nutrient densities of certain foods, and how some
real, whole foods can serve as supplements in and of themselves,” said Brush in
his email. “Time after time, our survey data shows that consumers prefer
nutrition delivered in food rather than a pill.3
With that in mind,
I think the supplements industry and functional ingredients industry is
beginning to wake up to the new floor under their feet, but they’ve got a long
way to go to figure this out and meet consumers where they want to be. The old
approach to additive health ingredients in a packaged food with an aggressive
health claim is moving further and further off trend.”
Additional areas of
projected importance and growth within the natural products industry include
the influence of food on the pharmaceutical industry — which Brush termed “Food
Meets Phood” — as seen in the increase of food science entities like the Nestlé Institute of
Health Sciences, as well as the emerging healthcare field termed personalized
medicine, which tailors medicine and wellness techniques to the individual
person and his or her specificities, such as genes and information gathered
through blood tests. This sector includes companies that provide personal
genome services, personalized health and wellness recommendations based on biomarker
diagnostics, and genetically customized supplements and skin care products.
—Lindsay Stafford Mader
References
1. Brush M. State of the industry.
PowerPoint presentation at: State of the Industry session at Natural Products
Expo West; March 2013; Anaheim, CA.
2. Agin K. Salad in a supplement. WholeFoods
Magazine. July 2009. Available at:
www.wholefoodsmagazine.com/supplements/features/salad-supplement.
Accessed April 2, 2013.
3. French S, Natural Marketing Institute.The US Botanical Market: Latest
Consumer Insights. Presented at: American Herbal Products Association Botanical
Congress. April 2012.
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